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Is Sirius XM (SIRI) planning to hike its subscription rates later this year?

Gabelli & Co. analyst Brett Harriss thinks so. In fact, he raised his rating on the shares this morning to Buy from Hold, in part on the theory that the company has pricing power that the Street might not appreciate. Note, by the way, that while he is bullish on Sirius, he thinks the best way to play the stock is via Liberty Capital (LCAPA), the company's largest single investor.

Harriss notes that as a condition of the July 2008 merger of Siriux and XM, the company agreed not to raise prices for its basic subscription until August 2011. With August now less than six months away, no immediate pricing action is likely, but the analyst contends that the company is likely to gradually increase prices from here. He's modeling a 4% average annual price increase through 2015.

"With a largely fixed cost basis, price increases should be highly accretive," he writes in a research note. Harris estimated that a $1 a month increase in ARPU across the company's 20 million subs would mean $185 million in additional EBITDA.

Meanwhile, Harriss also thinks the company could start buying back shares in 2012. "Management has expressed comfort with a debt to EBITDA ratio of 3.0x which implies share repurchases could begin in the

second half of 2012," he writes. Harriss thinks the company could return as much as $6 billion - 55% of the company's current market cap - through 2015.